Estimate salvage value after four years of operation

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Reference no: EM13239829

Nan King Furniture owns and operates an industrial lift truck in their warehousing operation. The record indicates that the lift truck was purchased four years ago at $12,000. The estimate salvage value is $3,000 after four years of operation.
First-year O&M expenses were $2,500, but the O&M expenses have increased by $500 each year for the first four years of operation. Using i = 12% compute the annual equivalent costx of the lift truck for four years on a before-tax basis.

Reference no: EM13239829

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